Sphingosine-1 -phosphate (S1P) is a bioactive lipid produced from the metabolism of sphingolipids that regulates vital biological processes, among which cell growth, survival, and motility are prominent. It is now well established that S1P is the ligand for a family of specific GPCRs, the S1PRs. Its intracellular actions are rar less understood, but it antagonizes apoptosis mediated by ceramide, a stress-induced sphingolipid metabolite. Due to the pivotal roles of S1P, its levels are low and tightly regulated in a spatial-temporal manner by the balance between sphingosine kinase-dependent synthesis and degradation by an endoplasmic reticulum S1P lyase and still not well-characterized phosphohydrolase activities. Cloning of S1P phosphatases, prototypes of a highly conserved class of lipid phosphate phosphohydrolases, will now enable us to use molecular approaches to examine their importance in regulation of sphingolipid metabolites and should help to unravel their physiological functions. It is our hypothesis that S1P phosphatases are not only important in S1P metabolism but also have previously unrecognized roles in regulating ceramide biosynthesis and are gateways that determine the dynamic balance of these two sphingolipids and consequently, cell fate decisions. We will thus examine how S1P phosphatases act as molecular switches between autophagy and mitochondrial-dependent events leading to apoptosis. We will also evaluate the possibility that S1P phosphatases play a role in termination of S1P signaling at the cell surface. If so, this could be an important physiological and pharmacological target for controlling the bioavailability of S1P at the S1PRs. As S1P can act in an autocrine manner, we will examine the notion that S1P phosphatases regulate inside-out signaling by reducing intracellular levels of SIP and attenuating signals through its receptors important for cell locomotion. Emphasis will be on regulation by S1P phosphatases of key elements of directed cell movement downstream of S1 PRs. In addition, we will determine the intracellular functions of S1P in the nucleus and identify its direct cellular target(s). Knowledge of how the S1P phosphatases regulate the bioactive lipid mediator S1P and its functions both outside and inside cells not only represents a new research avenue of basic biology, it also has many biomedical implications, especially for cancer, angiogenesis, cardiovascular disorders, inflammation and allergic responses.